Merck KGaA Q3 core EPS 1.41 eur, beats forecasts; reaffirms opg guidance UPDATE

Merck KGaA Q3 core EPS 1.41 eur, beats forecasts; reaffirms opg guidance UPDATE

	Published : Wed, 24 Oct 2007 07:26 By : Agencies Print this Story

(Adds Erbitux, group sales, FY sales forecast)

Darmstadt, Germany (Thomson Financial) - Merck KGaA said core EPS increased to 1.41 eur in the third quarter, beating market expectations amid solid sales in its liquid crystals division.

Core EPS - a measure of profit after tax excluding write-downs and integration costs linked to its acquisition of Serono and other one-off items - rose from a like-for-like 0.96 eur in the year-earlier period, the company said in a statement.

Analysts had expected the earnings measure to increase 23 pct to 1.18 eur, based on the average of five estimates collected by Thomson Financial News.

Writedowns, exacerbated by impairments on overvalued inventories at Serono, reduced net income to 36.2 mln eur in the third quarter from 144.3 mln eur a year earlier.

Sales of liquid crystals, Merck's main profit driver and source of 44 pct of operating profit last year, gained 15 pct to 238 mln eur in the third quarter, meeting analysts' expectations.

Analysts has been expecting updated guidance on the liquid crystals business, which Merck however did not provide in the statement.

However, revenues from its Erbitux cancer drug totalled 118 mln eur, less than the 123.8 mln eur estimated by analysts albeit up 36 pct from a year ago.

Group sales rose to 1.741 bln eur from 1.084 bln, just short of forecasts.

Merck is trying to get the drug, its second-best selling after multiple sclerosis treatment Rebif, approved to fight lung cancer and other indications beyond its current use against tumours of the colon, head and neck.

While Merck reiterated an earlier forecast of overall sales, excluding the effect of currency swings, to rise 7-9 pct over the full year, it specified that growth including foreign-exchange effects is set to be limited to between 4-6 pct.

Merck's chemicals division, which includes liquid crystals, continues to be hurt by 'a strong negative impact' from the weak dollar, according to the statement.

The company reiterated its existing forecast for full-year operating profit including amortizations on Serono to rise more than 20 pct. The year-earlier reference figure for that measure does not include Serono, Merck added.

ludwig.burger@thomson.com

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